Kas adds €24m from Cedel sale to pension fund
NETHERLANDS – Dutch banking and financial group, Kas Bank, is to use a sizeable portion of the €55m gained in the sale of its share in Cedel International, to reduce its pensions costs, which have risen to represent 16% of the bank’s salary liabilities as a result of falling stock markets.
Specifically, the bank has set aside €24m towards the reduction of future pension costs, with a further €7m to cover the expense incurred by its maturing early retirement scheme. Kas says €4m will be reserved for “unforeseen expenses”.
A spokesman for the bank refused to elaborate on the move, except that it had been brought about by the fall in stock market values. “Many pension schemes that invest heavily in equities are running into trouble at the moment. We are lucky to have shares like this at hand to sell. Not all pension funds have this luxury,” he says.
The spokesman confirms the pension fund, which is currently managed by Delta Lloyd, has dropped in value but was unable to say how much. According to International Pension Funds and their Advisors, the fund was worth €80m at the end of last year.
He did, however, say the bank may review the fund’s investment strategy later in the year if the troubles continue. “We are aware that some funds have already taken steps to stem their equity investments to avoid further losses. We will do the same if the situation hasn’t improved by the fourth quarter,” he says.